Need to press fast-forward on your home sale due to a sudden life change or general impatience? The easiest lever you have to control the speed of the process is price, which you can ratchet up or down at a moment’s notice.
But lowballing the price for the sake of a quick sale could force you to accept a disappointing offer.
Your best bet? Find out how to price your home to sell quickly without having to make major compromises. We’ll show you how to take a measured approach by incorporating these 5 tips that incorporate market data, an aggressive sales strategy, and professional expertise to secure a fast offer that won’t leave you in the lurch.
Tactic #1: Piece together housing conditions and your home’s fair market value to set a competitive price.
This is not the time to fly blind with a guess-and-check pricing strategy. Instead, the first thing you should do is research local real estate conditions and national housing trends to get a temperature reading on the market. The following indicators will help you take an accurate pulse:
- Inventory levels
Inventory is measured as months of supply, which indicates how long it would take to sell all the homes currently on the market. Areas that exceed 6 months of supply are considered to be a buyer’s market. A surplus of housing inventory gives buyers more options and heightens competition among sellers, putting downward pressure on prices. When inventory rises, sellers have to price their home further below market value to move it quickly. In a seller’s market, on the other hand, you’ll have more leverage to price the house optimistically and still get offers.
- Home price movement
Real estate is an appreciating asset and home values generally rise over time, but one important market indicator is yearly home price gains. If homes are gaining value at a pace above 2-3% year over year, consider that to be a hot market—on the other hand, slowing home price gains (if you’re seeing annual drops in price gains) are a sign that you’ll have to price the house more aggressively to sell it fast.
- Mortgage rates
Keep an eye on national mortgage rates. The lower the interest rates, the more willing many consumers are to buy a home—but talk of spiking rates can inspire some buyers to act fast in order to lock in competitive rates, too. If there’s been murmuring from the Fed about raising interest rates, you may be able to get some compelling offers.
- Comparable homes in your area
A comparative market analysis examines homes in your area that are similar to yours in terms of square footage, age, general condition, and upgrades. You may notice that your neighbor down the block sold his home with the same original floor plan as yours for a higher amount than your agent says is fair market value for your home. But did he recently add an extra bathroom? Remodel his kitchen? Was his house built the same year as yours, or five years later? You have to take these factors into account to price your house in the proper range, whether it’s above, below, or right in line with the other houses on your block.
Let’s piece together the above bullet points to illustrate how they collectively impact your strategy for pricing the house to sell quickly:
Say you and your agent reviewed data on local market conditions and came to the conclusion that home price gains are chilling, fewer buyers are entering the market due to rising mortgage rates, and with winter coming there are fewer house hunters at the moment.
Based on the comparable homes in your area, you’ve determined that fair market value for your property is in the $269,000-$290,000 range. Put these clues together and you and your agent would decide to price at the lower end of the price range (such as $270,000) to draw a quick offer.
Another strategy would be to price just below the range determined by reviewing the comps, which brings us to our second tactic.
Tactic #2: Undercut the price 5-10% and try to spark a bidding war.
Many sellers feel anxious about underpricing their homes, but sometimes this tactic can work in the seller’s favor says Trice Massey, a top-selling agent in Kansas-City, MO who has sold 82% more properties than the average agent in her area. An artificially low price can encourage multiple offers on your home, spark a bidding war, and lead to a quick (and profitable) sale.
Massey suggests sellers set a list price at about 5%-10% below the calculated market value. In her market, you could predict a home priced this way to bring about 30 to 50 potential buyers to view the house in a three day period, she says.
“When we do this kind of sale, many sellers have a fear that they’re leaving money on the table,” says Massey. “However, they typically get multiple offers.”
While there are no guarantees, it’s not unusual for the seller to recoup the amount of money they initially took off the price of the house when this happens, Massey says.
Of course, in an area with a strong market, well-maintained or upgraded houses are good candidates for pricing at fair market value. “These houses will sell, normally within a week, no longer than two weeks,” says Massey.
“If your house is cute and neat and clean, I can price it at [the price] the neighborhood is selling for.”
Additionally, when pricing your home, factor in the cost of any needed repairs. A good place to start the bidding is the value of the home minus the cost of any necessary repairs. Then, subtract 5%-10% from that number, assuming you plan to price below market value to attract multiple bidders.
Tactic #3: Make an aggressive price reduction strategy with your agent.
It’s possible that even if you’ve done the market research and executed a well-researched price strategy, your property could end up lingering on the market longer than you had hoped.
Ultimately, the right price comes down to what a buyer will pay for the house given its current condition, your location, and the real estate climate. Sometimes you’ll nail it right away. In other cases, you’ll realize after-the-fact that the number you and your agent agreed upon was too high.
Many sellers also see their house through rose-tinted glasses, and it may be difficult to let a house full of memories go at a price that will guarantee a quick offer.
That’s why when you set out to price the house for a fast sale, you need a plan B in place. The most effective contingency plan is an aggressive price reduction strategy that you agree to with your agent ahead of time.
Massey offers her seller clients a deal when they want to price higher than she advises: test it for two weeks, and after that, drop the price.
“We have an agreement that we’re going to bring the price down together,” she says. It’s key to take cues from the market and be honest with yourself when the house isn’t getting offers.
However, one should never use a price reduction in advertising (for example: “Priced to sell!” or “Was $900,000, now $825,000!”). Calling attention to the price cut in this way can scare away potential buyers.
“This is a no-no,” says Massey. “People will think there’s something wrong with your house.”
Instead, have your agent and their staff share quality photos of your home and its neighborhood online. “Online marketing is what sells houses,” says Massey—and with 51% of recent home buyers saying they found the property they eventually bought on the internet, she’s not wrong.
Another strategy to consider is reaching out to potential buyers that viewed the house and seemed interested but did not make an offer. Let them know there may be a price cut coming and see if they would like to make an offer before you adjust the price. Once the price has been lowered, listing websites will send out alerts to potential buyers, which may pique interest, too.
Tactic #4: See what a cash buyer would pay for your house.
Cash is king, especially in real estate. Cash buyers are generally less risky for the seller, paving the way for a smooth transaction that doesn’t require jumping through financing hoops.
Rather than waiting up to 45 days for a loan to process, a cash transaction should process within two weeks. These sales don’t require an appraisal, though in most cases, cash buyers will still require a standard home inspection.
Note that direct buyers will likely offer a discounted price as part of their negotiations. But the convenience and speed of sale might be more appealing than that extra money, especially if you stipulate that you’re selling the house “as is”—if the house needs repairs, the seller won’t be on the hook for them.
HomeLight features its own marketplace for this kind of transaction called Simple Sale. With a network of over 100 pre-approved “iBuyers” (instant home buyers), Simple Sale allows home sellers and agents to compare competitive offers that may offer up to about 95% of the home’s fair market value.
Curious what your house could command from an iBuyer in your market? Just fill out some information about your home and location and we’ll present you with the best price ranges available from a Simple Sale buyer. Then you can make an informed decision from there.
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Tactic #5: Avoid overpricing at all costs.
Tempted to price your house at the tip-top of its range—or even a little over market value? Stop! When you need to sell fast, you’ve got no time for games.
Overpricing can lead to a house sitting on the market longer, and the more days on the market the house spends, the more ammo a buyer has to make lowball offers. Plus, you’ll be waiting longer before you can wrap up the sale of your home and move on to the next chapter of your life.
If you need to sell a house quickly, it pays to keep the price measured. “If you’re priced below market value, you should be getting offers within hours,” Massey says.
What’s next? Make sure you’ve got an agent who can put a rush on the closing
If you need to move house quickly, you’re smart to do your homework and take a strategic pricing approach. Once you’ve got an offer in hand, though, you’re up against a number of roadblocks to closing.
How can you smooth out the speed bumps? Partner up with a top local real estate agent who’s dedicated to the outcome of a fast sale in their communications and negotiations.
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Massey maintains a staff and works with a title company to handle all clerical aspects of the transaction so she can focus on selling, negotiating, and representing the interests of her client. Having done this many times before, her staff is ready with the titlework ahead of time.
The speed at which an agent communicates is another indicator of their suitability. Do they quickly respond to texts, voicemails, and emails? Or do they leave you hanging?
“If they’re not responding to their client, they’re probably not responding to potential sales,” Massey says. Take a hint, and work with someone who can move at your desired pace.
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